Li-Ning Explained

Li-Ning Company Limited
Native Name:李宁有限公司
Type:Public
Industry:Sportswear and sports equipment[1]
Products:Athletic shoes, apparel, sports equipment, accessories
Area Served:Worldwide
Revenue: US$1.11 billion (FY 2012)[2]
Net Income: US$318.8 million (FY 2012)
Li-Ning Co., Ltd.
S:李宁有限公司
T:李寧有限公司
P:Lǐníng Yǒuxiàn Gōngsī
Order:st

Li-Ning Company Limited is a Chinese sportswear and sports equipment company founded by former Olympic gymnast Li Ning. The company endorses a number of athletes and teams worldwide.

History

The company was founded in 1989 by Li Ning, a former Chinese Olympic gymnast. As of 2015, Li Ning remained the chairman of the company's board of directors.[3] In 2005, Li-Ning created a joint-venture with French sports apparel company, AIGLE, giving Li-Ning the exclusive right to be the sole distributor of AIGLE's products in China for 50 years.[4] In 2006, Li-Ning posted revenues of US$418 million, and total profits of about US$39 million. As of March 2007, there were 4,297 Li-Ning retail stores.[5] The company directly owns some of the retail stores while others are franchised.

In January 2010, Li-Ning opened its U.S. headquarters and flagship store in Portland, Oregon. In 2010, as part of the 'Revitalization' of the brand, Li-Ning released a new logo and the new slogan "让改变发生" "Ràng Gǎibiàn Fāshēng" in Chinese, translated to "Let the Change Occur" in English. In January 2011, Li-Ning entered into a partnership with Chicago-based Acquity Group[6] to expand its U.S. distribution and brand awareness.

In April 2012, Li-Ning was awarded the highest distinction of "Outstanding Contribution to Quality Standardization Award" in knitwear division at the Third National Textile Standardization Technical Committee's inaugural meeting held in Zhuhai, Guangdong. In September 2012, Li-Ning signed into a partnership with NBA player Dwyane Wade.

In 2013, The Group recorded revenue of RMB2,906 million, which represented a decrease of 24.6% year-on-year, due to near-term focus on sell-in reductions, inventory clearance, and reducing the number of stores.[7] The Group projected a net loss of up to 820 million yuan (US$13.19 million) for 2014, the third straight year where it was unprofitable.[8] [9]

In 2019, Li-Ning reported revenues increased by 32 percent and reached 13.87 billion yuan against 10.51 billion yuan a year ago. Net profit attributable to equity holders increased to ¥1.5 billion from ¥715.3 million which vaulted 110 percent.[10]

In 2020, Li-Ning saw its revenue increase 4.2 percent year-on-year to 14.46 billion yuan ($2.22 billion), the net profit increased on a comparative basis by 34.2 percent to 1.7 billion yuan ($261 million).[11]

On 7 March 2022, the world largest sovereign wealth fund, the Government Pension Fund of Norway excluded and divested from Li-Ning. The reason for this exclusion was an "unacceptable risk that the company contributes to serious human rights violations".[12] [13] That same month, the US Customs & Border Protection began detaining Li-Ning products from entering American soil due to the company using North Korean labor in its supply chain, causing them to withdraw from the US market.[14]

Marketing

The company has used sponsorship deals, particularly with athletes and sports teams, both in China and abroad, to raise its profile.[15]

In 2006, the company entered strategic collaborations with the National Basketball Association, the Association of Tennis Professionals, the Chinese University Basketball Association, and the Chinese Football Association. It also signed sponsorship deals with the Chinese national teams and the Sudan track and field team. The company would also provide apparel for the Argentina national basketball team at international events including the 2008 Summer Olympics and 2012 Summer Olympics. A similar deal was made with the Swedish Olympic Committee.

Indian Olympic Association had signed a sponsorship deal with Li Ning for the Rio 2016 Summer Olympics.[16]

In celebration of its 30th anniversary, the brand held a fashion show on January 18, 2020, during Paris menswear fashion week. The show also showcased a 10-piece capsule collection in collaboration with Jackie Chan and a sneaker done up with Dwyane Wade.[17]

2008 Beijing Olympics

Li-Ning sought sponsorship opportunities related to the 2008 Summer Olympics held in Beijing, China. The company arranged to outfit every presenter for broadcaster CCTV-5, the sports channel of the Chinese Central Television.[18] Li-Ning also sponsored the Chinese national teams of Gymnastics, Table Tennis, Archery and Diving. It also sponsored the Spanish basketball team, as well as the Argentine and Swedish Olympics teams.

In a now famous case of ambush marketing (a subset of guerilla marketing), when entire countries were tuned to the 2008 Summer Olympics opening ceremony, millions saw Li Ning light the torch.[19] Though the Li-Ning company was not an official sponsor of the games, it had still associated itself with the games through its role as an equipment supplier for several Chinese Olympic teams, and through Li's status as a Chinese sports and business icon. Consequently, the ceremony generated tremendous exposure for Li's eponymous company to the chagrin of official sports apparel supplier Adidas, as viewers did not realize that he had been fully dressed in Adidas as per its sponsorship rights to the Games.[20] The company's share price increased by over 3% on the first day of trading after the opening ceremony.[21]

Sponsorship

Li-Ning was an official marketing partner of the National Basketball Association and has/had sponsorship deals with ten players: Baron Davis (retired), Shaquille O'Neal (retired), Damon Jones (retired), José Calderón (retired), Cleanthony Early of the Rio Grande Valley Vipers, Glenn Robinson III of the Golden State Warriors, Evan Turner of the Atlanta Hawks, Dwyane Wade of the Miami Heat (lifetime contract), and CJ McCollum of the New Orleans Pelicans.

In 2006, O'Neal signed a four-year deal with Li-Ning, reportedly worth US$1.25 million, the largest deal made by the company, and the highest profile signing of an American sports star by a Chinese company.[22] O'Neal cited former teammate Damon Jones and the Spanish national basketball team's deal with Li-Ning as influences on his decision to sign with Li-Ning.[23] [24]

Previously, Li-Ning also operated as shirt sponsor for the Vietnam national football team from 2006 to 2008, which saw Vietnam's prominent rise to successes in 2007 AFC Asian Cup and 2008 AFF Championship.

In 2010, Li-Ning became the official shirt sponsor for Tajikistan's tennis team, as well as for FC Istiklol.

In 2012, Dwyane Wade left the Jordan Brand for Li-Ning. The deal was worth $10 million.[25]

In 2019, Li-Ning announced that it would not do business with the Houston Rockets after the General Manager of the NBA team tweeted in support of the 2019–20 Hong Kong protests.[26] Also, Li-Ning along with Sunlight Sports Pvt. Ltd. (representative and distributor of Li-Ning in India)[27] signed sponsorship deals with Indian badminton players P V Sindhu and Kidambi Srikanth.[28] [29]

Olympic Committees

Basketball

Football

National teams

Club teams

Tennis

Winter sports athletes

Former sponsorships

Basketball players

Football clubs

National football teams

Environmental practices

In July 2011, Li-Ning, along with other major sportswear and fashion brands including Nike, Adidas and Abercrombie & Fitch, was the subject of a report by the environmental group Greenpeace entitled 'Dirty Laundry'. Li-Ning, along with Abercrombie & Fitch, Adidas, Bauer Hockey, Calvin Klein, Converse, Cortefiel, H&M, Lacoste, Nike, Phillips-Van Heusen Corporation (PVH Corp) and Puma, were accused of working with suppliers in China who, according to the findings of the report, contribute to the pollution of the Yangtze and Pearl Rivers.[34] Samples taken from one facility belonging to the Youngor Group located on the Yangtze River Delta and another belonging to the Well Dyeing Factory Ltd. located on a tributary of the Pearl River Delta revealed the presence of hazardous and persistent hormone disruptor chemicals, including alkylphenols, perfluorinated compounds and perfluorooctane sulfonate.

Notes and References

  1. Web site: Li Ning online sports. Li Ning: Sports.
  2. News: Li Ning Scaling Back After 2012 Loss. Wall Street Journal. 27 March 2013. 24 January 2014.
  3. Web site: Executive Directors . LI Ning . 2010-06-02 . 2011-09-15 . https://web.archive.org/web/20111001164729/http://www.lining.com/EN/company/inside-1_5_1.html . 2011-10-01 . dead .
  4. Web site: Welcome to Li-Ning Company Limited . Lining.com . 2011-04-30 . 2011-09-15 . https://web.archive.org/web/20110917084923/http://www.lining.com/EN/home/index.html . 2011-09-17 . dead .
  5. Web site: Press Releases . Lining.com . 2011-09-15 . https://web.archive.org/web/20111001164717/http://www.lining.com/EN/press/inside-3_1_26.html . 2011-10-01 . dead .
  6. Web site: Burkitt . Laurie . Chinese Sports-Apparel Maker Li-Ning Makes Push in the U.S. - WSJ.com . Online.wsj.com . 2011-01-19 . 15 September 2011.
  7. Web site: Li Ning Company Reports Interim Results for 2013. Li-Ning. 23 July 2014.
  8. Web site: China's Li Ning sportswear brand may be too troubled for even Dwyane Wade to save. 9 January 2015 .
  9. News: Li Ning's rise and fall marks a cautionary tale. Financial Times. 23 January 2015. Waldmeir. Patti.
  10. Web site: 2020-03-30. Li-Ning's Sales Expand 32 Percent In 2019 . 2021-11-18. sgbonline.com. en.
  11. Web site: 2021-03-19. Chinese Sportswear Giant Li Ning's 2020 Revenue Growth Disappoints. 2021-11-18. The Business of Fashion. en-GB.
  12. Web site: Decisions on observation and exclusion . 7 March 2022 .
  13. Web site: Li Ning Co Ltd . 7 March 2022 .
  14. Web site: CBP Enforces Countering America’s Adversaries Through Sanctions Act Against Li-Ning Sporting Goods. 2022-03-15. 2024-06-28. US Customs & Border Protection.
  15. News: Cheng . Allen T. . The Mainland's Sneaker King . https://web.archive.org/web/20080316042803/http://www.time.com/time/magazine/article/0,9171,332084,00.html . dead . March 16, 2008 . TIME . 2002-07-29 . 2011-09-15.
  16. Web site: 'Made in China' labels to adorn Indian athletes' kit at Rio 2016 Olympics. 23 April 2016.
  17. Web site: Estiler . Keith . Li-Ning Debuts Jackie Chan Capsule & Shoe Collab With Dwyane Wade . Hypebeast . 2020-01-19 . 2020-03-27.
  18. News: Leibenluft . Jacob . Female Weightlifters, Spanish Basketball Stars, and Kim Jong-il: The strange world of Chinese sneaker endorsements . July 25, 2007 . Slate .
  19. Tschang, Chi-Chu. "Olympic Ambush Heats Up Li Ning-Adidas Rivalry", Bloomberg, 11 August 2008. Accessed 4 July 2016.
  20. Web site: The Greatest Free Ad Ever : 2008 Summer Olympics blog : Rocky Mountain News . Blogs.rockymountainnews.com . 2008-08-09 . 2011-09-15 . dead . https://web.archive.org/web/20110918043004/http://blogs.rockymountainnews.com/2008_summer_olympics_blog/archives/2008/08/the-greatest-free-ad-ever.html . 2011-09-18 .
  21. News: Liu. Melinda. Light My Fire: Li Ning's Stock Rises. August 12, 2008. Newsweek. dead. https://web.archive.org/web/20080818080815/http://www.blog.newsweek.com/blogs/beijingolympics/archive/2008/08/12/light-my-fire-li-ning-s-stock-rises.aspx. August 18, 2008.
  22. Web site: People's Daily Online - O'Neal the real deal as Li-Ning goes global . English.peopledaily.com.cn . 2006-08-15 . 2011-09-15.
  23. Web site: Shaq signs shoe deal with Chinese company Li-Ning - NBA - ESPN . . 2006-08-15 . 2011-09-15.
  24. Web site: Shaq signs with China-based apparel company - NBA- NBC Sports . https://web.archive.org/web/20060826090406/http://www.msnbc.msn.com/id/14361632/ . dead . 2006-08-26 . MSNBC . 2006-08-15 . 2011-09-15.
  25. Web site: 2012-10-13. Dwyane Wade signs shoe deal with Li-Ning worth $10 million. 2020-07-21. FanSided. en-US.
  26. News: NBA stirs U.S. hornet's nest, faces China backlash over Hong Kong tweet. Reuters. 6 October 2019.
  27. Web site: Li Ning has big plans for India | WARC.
  28. News: P V Sindhu signs approx 50 crore deal with Li Ning. The Economic Times. Laghate. Gaurav.
  29. Web site: Shuttler Kidambi Srikanth signs 4-year deal with Li-Ning. 14 January 2019.
  30. http://www.china.org.cn/sports/2021-10/27/content_77834925.htm Hu's career-high sees Guangdong win streak reach 5
  31. https://www.bild.de/sport/mehr-sport/basketball/basketball-neuer-point-guard-fuer-hamburg-towers-veteran-ray-mccallum-kommt-78059422.bild.html Ein Veteran für die Towers
  32. Web site: FC Chitwan - Here's the official FC Chitwan . Hi-in.facebook.com . 2022-03-21.
  33. Web site: . LI-NING TIẾP LỬA BÓNG ĐÁ VIETTEL THĂNG HOA MÙA GIẢI MỚI – Li-Ning Sport Vietnam - Cửa hàng trực tuyến chính thức . Lining.com.vn . 2022-03-21.
  34. Web site: Dirty Laundry: the toxic secret behind global textile brands. Greenpeace. dead. https://web.archive.org/web/20120131121756/http://www.greenpeace.org/international/Global/international/publications/toxics/Water%202011/dirty-laundry-2pages.pdf. 2012-01-31.